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Friday, March 31, 2017

Brookings — Is Europe an Optimal Political Area?

Employing a wide range of individual-level surveys, we study the extent of cultural and institutional heterogeneity within the EU and how this changed between 1980 and 2008. We present several novel empirical regularities that paint a complex picture. While Europe has experienced both systematic economic convergence and an in- creased coordination across national and subnational business cycles since 1980, this was not accompanied by cultural convergence among European citizens. Such persistent heterogeneity does not necessarily spell doom for further political integration, however. Compared to observed heterogeneity within member states themselves, or in well functioning federations such as the US, cultural diversity across EU members is a similar order of magnitude. The main stumbling block on the road to further political integration is not heterogeneity of tastes or of cultural traits, but other cleavages, such as parochial national identities.

A globalist perspective on European political integration. The problem is "parochial national identities." Which is exactly what globalists assume at the outset. This what one would expect of Brookings.

If the perceived benefits of integration are high, and cultural heterogeneity is relatively small and plays only a minor role, what prevents further steps towards a political union? We think that the answer is the heritage of nationalism. Europeans retain strong national identities, amplified by different languages, and the memories of past violent conáict are still too strong and recent to overcome mutual distrust (see Guiso, Sapienza and Zingales, 2009). Nationalist sentiments are on the rise, and this was true even before the financial crisis, which probably reinforced this extant tendency. This is documented in Table 7.1. Although there is much variation among countries, between 1980 and 2009 most Europeans have become more proud of their national identities: on average the percentage of respondents who are proud of their nationality has increased from 37% in the early 1980s to almost 50% in 2008-09.

Can something be done to dampen nationalism and increase European identification?41 In the long run, mutual distrust among Europeans can be reduced by expanding European educational initiatives. In the history of nation building, public education always played a major role (see Aghion, Persson and Rouzet 2012; Alesina, Giuliano and Reich, 2017). The Erasmus program of student exchange works well, but the evidence suggests that it has not had a large impact in shaping European identities, probably because self-selected participants are already very pro-Europe (Sigalas, 2010; Wilson, 2011; Mitchell, 2011). This program could be expanded to reach more young people in high school or in technical institutions, and not just primarily university students. Moreover, school programs could be designed to include a more extensive curriculum covering European institutions and citizenship.The feasibility of European political integration also depends on how it is achieved. One issue concerns the policy areas over which it takes place. As mentioned above, Europeans seem ready to accept a transfer of sovereignty to the center in the provision of some global public goods like security, border control, environment protection. A political union should also be resilient to economic shocks like the recent financial crisis, however, and this presupposes agreement on a (possibly minimalist) set of principles of risk sharing and solidarity. It is uncertain when and whether Europeans will be ready to agree on such principles. Redistribution is a sensitive issue, and replicating the welfare state at the European rather than at the national level seems beyond reach for now. While Europeans are very sensitive to inequality within their own countries (relative to Americans, for instance42), redistribution across national borders is perceived as much less politically viable. Nonetheless, it is hard to imagine a federal Europe without some cross-border redistribution and risk-sharing scheme.

So the conclusion seems to be that Europe is an optimal political area if "parochialism" can be eliminated. Good luck with that.

"Karl Marx, outlined his vision of a Europe and world in which the nation state would give way to the international brotherhood of the workers of the world. Marx held economic and social class rather than nation as the defining separation under capitalism."

He could not have been more wrong about this. There is no international brotherhood of workers, nor will there ever be. In Soviet Union they had slogans like: prolétariat in all countries unite. Those were just slogans, It never happened in real life. Even the workers who believed in communism never felt that they had much in common with comrades in Cuba or China. No matter how the communist propaganda presented or faked It, It never happened.